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Cheerleading By The Media
From The Daily Capitalist
I am tired of the cheerleading by the mainstream press where they see every positive sign as a sure sign of recovery and every negative sign as "unexpected." Every article I read on new data from the Wall Street Journal or Bloomberg is the same--with mind numbing regularity. Worse is that they always find some economist to give them a positive quote to the effect that we are "turning the corner" or "the recovery is self-sustaining."
Here are some examples from recent news. These aren't cherry-picked:
Initial jobless claims rose by 18,000 for the latest reporting week of April 3, up to 460,000.
WSJ: " jobless benefits rose unexpectedly last week."
Bloomberg: "More Americans unexpectedly filed claims for jobless benefits ..." They like to get someone who is bucking the report to make us feel better and it's either Home Depot or Caterpillar: "Home Depot Inc., the largest U.S. home-improvement retailer, is adding store jobs for the first time in four years as it expects a rebound in sales, Chief Executive Officer Frank Blake said."
More on the unemployment situation later.
A lot of retailers reported good sales in March (Saks + 12.7%; Gap + 11%; TJ Maxx + 12%; Target + 10.3%; Macy's + 10.8%; Nordstrom + 16.8%; Kohl's + 22.5%). This is good stuff.
WSJ: "Shoppers opened their wallets even wider than expected in March." Here is their rosy economist: "'It's a blow-out month, the biggest monthly increase we've seen since we began tracking monthly retail sales in 2000,' said Ken Perkins, president of Retail Metrics."
Bloomberg: "Gap, Saks Lead Largest Monthly Sales Gain in a Decade."
OK, this is pretty fair reporting. But it's not a blow-out. Look at this one-year time frame chart which shows PCE, personal savings, transfer receipts (payments from the government), and disposable personal income:
Looks pretty flat to me. While the transfer payment numbers aren't as current, you should know that they account for 20% of personal income.
Job Openings in US decrease to 2.72 million in February (- 4.6%). They fell for the first time in three months. There are more than 5 people vying for every opening, up from about 1.8 when the recession began in December 2007.
WSJ: They didn't even report this.
Bloomberg: I have to admit they didn't gild the lilly here. But they again mention again that Home Depot is hiring "for the first time in four years."
One in five US jobless--20%--are unemployed after a year according to a new Pew study.
WSJ: Again they missed this story.
Bloomberg: Kudos. They reported this fairly because it was Pew's data. They did mention that 162,000 new jobs were added in March.
162,000 jobs added in March. Of those, 48,000 were government workers, many related to the U.S. Census. These aren't real "economic" jobs. See my article: "Unemplyment Remains Unchanged in March."
WSJ: "created jobs at the fastest pace in three years." Their headline was: "Employers Added Most Jobs in Three Years in March." They noted that YoY that employment down another 1.8% and unemployment rate unchanged at 9.7%. Toward the end they mentioned that the broadest measure of unemploment (U-6, Marginally Attached Workers) was up from 16.8% to 16.9%. And at the very end they note that average hourly earnings (wages) for workers declined 0.1%.
Bloomberg: Pretty much the same. Instead of Home Depot adding jobs, this time they used another favorite, Caterpillar as an example. Funny, they forgot to mention that wage earnings declined, again. Both articles quote economists who think things are getting better.
Institute for Supply Management’s index of non- manufacturing businesses (services) rose to 55.4 from 53 in the prior month. This is another good sign, especially if looked at in isolation.
WSJ: "'It looks like the recovery is definitely here in the service sector,' said Adam York, an economist with Wells Fargo Securities."
Bloomberg: "higher than anticipated." “'The recovery is looking increasingly self-sustaining,' said James O’Sullivan, chief economist at MF Global Ltd."
Private-sector jobs in the U.S. dropped by 23,000 this month. This ADP report was at odds with the BLS numbers which showed employment gains.
WSJ: "The news rattled investors and economists who had expected March would show a gain in payrolls." Economist Joel Prakken, chairman of Macroeconomic Advisers said the ADP report didn't include any weather rebound or census hiring and that the numbers were reasonable.
Bloomberg: "Companies in the U.S. unexpectedly cut payrolls." They also blamed it on the weather and quoted Mr. Prakken as well. They again cited Caterpillar as a company that is hiring.
Personal spending (PCE) increased by 0.3% in February, but personal income was flat and savings were lower. PCE is really weak overall. No one connected the dots that said consumers had to resort to savings to make purchases. See my article: "Consumers Draw Down Savings For Personal Consumption." PCE is really weak overall.
WSJ: They reported the facts. They didn't make a note of the connection between a rise in PCE and a decline in savings.
Bloomberg: "Consumer spending in the U.S. rose in February for a fifth consecutive month." “'Considering the circumstances, this is a fine performance with the job market still not strong,'” said Michael Moran, chief economist at Daiwa Securities America Inc. in New York." They noted that savings declined as a result of spending and declining wage earnings.
Oh really?
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We know what they are selling, but it does not seem like the majority are buying.
ZH gone mainstream blogosphere....rant, rave against the machine...dood I just wanna make some money and this HFT low volume ramp has got LEGS, please keep shorting....
You could always buy the bank -- see my other article.
Thanks for chronicling this puppet fest...
I would like to add that when Bush was president, and did the exact same "reflation" plan after 9/11 and the dot com bust, the media was howling about a "jobless recovery" for years, even at the point when the economy was steadily adding 100,000+ bubble jobs per month. There was never a single green shoot under Bush. Just an observation.
I noticed that too except for FOX news the rest of the MSM kept just saying how bad things were until they finally had to admit 300,000 + housing bubble jobs were being added each month before the 04 election.
I await my name, boldly proclaimed, in the headlines.
It's all kool aid, the BLS undereported 1.2 million jobs lost during the last 18 months. 1.2 million, How can anybody believe this crap?
Bloomberg is good though on reporting on fraud and suing the FED, but the Kool aid the dish out is unbelievable
What has always bugged the shit out of me is the way they report some of the data. Like if the index is over 50, then the economy is "expanding". Never mind that we've gone from 70, to 60, to 51, never mind that, a reading over 50 brings out the BS media reports that "Manufacturing has expanded for the 3rd month in a row. UNreal. We are more and more like Russia every day.
I guess that the phrase "honest attorney" and "honest politician" can now have added to the vocabulary as "Honest Reporter" and can have the same connotation.
Until some of hte politicians and reporters(?) meet Mr. Pierrepoint, we will be in this boat that is sinking faster than heliocopter ben can bail.
I have grown used to seeing more and more cars in front of the goodwill store. TJ Maxx seems to be popular too.
I would add the whole propaganda machine started with green shoots over a year ago.
well now it's green shoots time, but they can't trot out that prase anymore.
I have written bloomberg a number of times regarding their reporting of economic stats. I think the just report what the voices say. there is no analysis
Absolutely Orwellian.
http://www.youtube.com/watch?v=rV3jgYHvTmk
All those numbers are b.s. as indicators for the most part. The 162,000 added jobs is a joke because about 50,000 were census and they are still adding 80,000 a month with that birth death model so the real number was probable about 34,000 or so and you need 120,000 a month just for the population gains to stay even.
Retail sales are having a big boost from survivor bias as many companies have shut some stores and others went bankrupt. State sales tax tells the true story on that and it only shows a real slight improvement so far nothing near 9%.
I just think it's a confluence of interests. GE almost shut down CNBC in 2002 near the bottom of the bear market. Look how much of the financial print media we lost during the Nascrash.
These guys know which side their bread is buttered on.
In that it's tax week for most, I see no harm in reporting this small bit of financial opinion. Two friends this week told me that their accountants advised them not to make any large purchases, that they are seeing signs that a financial crisis is becoming more likely. I took this to mean two things. They believe, 1) that value might be lost on large purchases, and 2) the chances of personal financial crises are increasing.
Somewhat related, perhaps, the AP had a story on the Dow this morning showing two charts: the top chart shows the Dow average increasing over the past year in a continuous, say 20%, long uphill incline. Under that chart is another chart showing the volume for that period, heading in the exact opposite direction, a continuous, say 20%, steady downhill decline. The two charts are exactly the same if one is turned upside down over the other.
Some points made in the article were that Main Street is not in the market, there’s been no correction along the way, and the volume gets less and less. A nervous investor said she usually associates a bull market with some volume increase. To paraphrase her words: It’s not only frightening, but confusing.
Good stuff here, Econophile. Thanks.
By the way, didn’t first quarter 2009 earnings results last May show that both Home Depot and Lowe's benefited from a "do-it-yourself" approach for strapped out consumers, with emphasis on landscaping, resulting in higher sales of paints and plants in the quarter? Maybe there's no repeat here, but it undoubtedly does affects spring employment.
One other note, John Williams’ Shadow Government Statistics in the March 12, 2010 Outlook Update for retail sales reported: “[A]ny relatively positive news in retail sales in the year ahead should reflect primarily inflated prices, not higher physical volume of sales.”
Strapped consumer , yes . Over last 5 months installing an upstairs kitchen ( longest honey-do project ever ) its a small kitchen to boot ,to replace a lower level kitchen in our cottage , now permament home . Doing all work myself . Cabinets 10k , Corian tops and sink 2 k , Appliances , from Best Buy at 20% off sale ,2k, building materials (wood, drywall, electrical, plumbing ,paint , etc.) 1k , new window , 5 hun. ( The strapped part is not new , all I saved on was labor - so far my pay is about 5$ an hour labor saved . Helping the economy sucks . This is the most horribly long project I have ever worked on
LOL, been there done that. Time to call this old house on wheels...Those 3 make me sick.....making everything look so easy!
LOL. But it could be worse. As iTuliper flintlock said recently regarding the following article: A responsible government would seek redress against the Chinese manufacturers. Of course, hard to do that when you have to go hat in hand to them for loan every year. Globalism is a race to the bottom. How can people not see this?
From iTulip News Forum, posted by don
U.S. Urges Homeowners to Remove Chinese Drywall April 2, 2010
By JAVIER C. HERNANDEZ
The federal government on Friday instructed families with certain Chinese-made drywall to rid their homes of the material and replace electrical wiring, gas pipes and sprinkler systems.
The drywall has been linked to respiratory and electrical problems in thousands of new homes, primarily in Florida and Louisiana. Consumer advocates have argued that high levels of hydrogen sulfide in the drywall corrode electrical wires and create health risks.
For now, homeowners must front the cost of removing the drywall, which builders estimate at more than $100,000 a home.
But lawmakers and consumer groups called Friday for providing financial assistance to the about 3,000 households that have complained about the drywall.
“Removing the problem drywall is the best solution currently available to homeowners,” the chairwoman of the Consumer Product Safety Commission, Inez Tenenbaum, said in a statement.
The commission was joined by the Department of Housing and Urban Development in issuing the recommendations. Those guidelines said homeowners should remove their walls and replace fire and carbon monoxide alarms, circuit breakers, outlets, switches and gas pipes.
The commission has recommended that the Internal Revenue Service allow homeowners to deduct drywall-related costs from their income tax returns.
“These are families who are suffering financially, they’re suffering physically, and in many cases the value of their home has gone down substantially,” said Scott J. Wolfson, a spokesman for the commission...
The commission has no evidence of long-term health problems, but it has hired an outside group to investigate that possibility. It is also exploring whether the long-term corrosion of the wiring could cause fires, though no fires have been reported.
A group of homeowners has sued the Chinese manufacturers and the American companies that imported the drywall in federal court in New Orleans. The case is pending.
The drywall was installed in homes across the South during the housing boom, when the supply of American-made drywall was limited and Chinese materials were cheap. Construction surged after hurricanes devastated many parts of the Gulf Coast....
http://www.nytimes.com/2010/04/03/bu...l?ref=business
http://www.itulip.com/forums/forumdisplay.php?f=
There are pockets of increased sales but I see ever increasing pressure on margins. In other words, net cash flow is actually stagnant or going down. Oil is currently putting pressure on many basic materials such as polypropylene.
Bernanke lives in a theoretical bubble; he will be proven wrong, spectactularly.
traffic is down at walmart. they are lowering prices on everything.
that says it all.
There was heavy traffic at my local WalMart on Good Friday to stock up for the the Easter weekend. It was also a payday Friday.
The following Friday (yesterday) it was absolutely dead. Shelves stocked but no people.
what does the corporatracy need with "people" or even employed "people", the "markets" will take care of it all.
+ 100
I found 40 cents under the sofa cushions today. That marks a 40 cent increase in income for the day over what I expected, since I don't work weekends. Also it is 60% higher than the previous one-day record for this sofa, established in August 2007 when I found a quarter.
A negative interpretation would hold that this does not represent actual income since it probably fell out of my own pocket at some earlier time. But I prefer to take an optimistic view and have revised future expectations to reflect this trend.
analogy certain to be borrowed... excellent.
Excellent !!
Beautiful analogy!
Econofile,
Interesting in that there are a lot of people mystified by the nonsense. And you are on the right track.
But to have a paid media is not unsimilar to paying rating agencies to rate BBB crap , AAA.
Who knows what the reaon is, but just how is it that an economy is going to progress when the tax take when all said and done is going to have to skyrocket in order just to have others still have some confidence that the US fiscal house is in order?
As everyone knows, things are nonsensical in the sense that the US has obviously evolved into a nonaccountable Fascist state.
There is no way that an economy can grow when a higher and higher portion of all prices are taxes.
Simply what has to occur if the US truly wants its house in order is to reduce taxes such that its portion will be a smaller part of all pricing, no matter what the product.
Hopefully, now that the Kennedy seat was lost, there is a wind of change in the US.
Something is brewing, and something is going to happen to change all of it.
You want to question the Facism? Go ahead.
Most people in the US already knows what has to happen.
One can get the gist by just watching CSPAN and watching the chiefs of Citi say that had nothing to do with anything. This is a perfect case of what is wrong with the US system. It cannot put its biggest crooks in jail.
Got money, got politics....you got a free pass.
Something tells me that the US citizens are going to be putting some IVY League heads on poles.
The league is IVY alright.... POISON IVY.....
As long as its IVY LEGAL....IT´s OK....
YEAH ?
WE are going to find out....
Not enough of the proletariat have been affected significantly in their eyes to effect the executions necessary to restore some common sense, foresight, honor and morality to our government and investment bankers.
In party after party I cannot get people to wrap their heads around the disaster that is going to befall them. They won't until they see white's of its eyes and then it will be too late for most of them.
Being negative all the time will make you sick and depressed. This article tells me more about you as a person then about the US economy.
There actually is a improvement in retail sales, I know this because I have a pretty important job in a retail chain and I'm confronted with the figures on a daily basis.
Overall, retail is counting on a 15% rise this year, and for 2010 we are only off the mark with 1.7%.
The only thing what keeps us awake for this moment is the rise in product prises from import. And that could be arround 20 to 85% this year and that would spur inflation on a hughe base and could be a spoil on the rebound.
Now take your red pill and get back into bed.
'There actually is an improvement in retails sales'...then why isnt that reflected in sales tax receipts, which keep dropping.
Agreed. Being as bearish as i can be sometimes masks the positive aspects. In reality, many bad economic facts can be stated even in good times. Our country has been running deficits for a long time. The fact is our country went from a modern day bank run in fall of 08, to a mini depression, and now to a recession. The improvements are laughable when charting them over time because the rebound is from such low levels. Nonetheless, there is some improvement. The difference, world governments are now all orchestrating the monopoly game together and will not let panic set in. This is why everytime some bad news comes out, Tyler shows where someone came in to stop the market's decline. Believe me, fiat money is all about confidence and a false reality. This is why my bearish tendencies can get the best of me. Remember the emperor's new clothes. The party was goin on just fine until some realist kid had to expose all to the reality. Now, the governments out there making sure those invited to the party are very impressed with the emperors new clothes or they cannot attend.
What a crock. Obviously you know more about pills.
Being lied to and taking it like a little bitch is for indoctrination camps. I'm sure the Hilter Youth enjoyed it.
Empty commercial RE doesn't lie. And it ain't getting any better. Fool.
Finish your kool-aid and get back out to the mall.
And you conveniently ignore the tsunami of other data. Retail may be up from its dismal levels, but if you think this is the start of a bull retail environment, you are on something. Watch those inventories, and don't get ahead of yourself.
Check your medication too.
econophile, reading this it sounds like youve been in the markets for 5 minutes
"I know this because I have a pretty important job in a retail chain ... rise in product prises"
I love how a guy with "a pretty important job" (in retail no less) can misspell a word like "prices."
There you have it folks, in a nutshell, why America is disintegrating, because people without talent, education, intelligence, or attention to detail are getting "pretty important jobs."
I have little doubt that receipts are up at the companies that survived last year. The receipts are up at Best Buy because Circuit City no longer exists, so some spending that might have gone to CC is now going to BB. Doesn't mean the consumer is back or the economy is getting better. But it does mean BB is making more money than last year.
You seem to narrow your definition of "being positive" , I broaden my definition of positive thinking to include the realization that your definition of positive when it becomes your definition of negative will be positive for me. Therefore your all inclusive idea that being either positive or negative is relative to what premise you buy. Is there a reality where false positive premises are negative? Yes, therefore you are a bandleader of the negative or are you one of those so shallow that positive or negative is relative only to money? Enjoy your life, they are making a new GM vehicle you didnt order out of your money right now. Theres a positive thought for you.
Mr. Retailer. You say sales are up 15% but then you say you can't sleep because prices from China ( and other places) are up 20-85%. Did it ever cross your mind to see if there was a correlation with prices increases and sales increases. Finally what market do you sell to Mr. Retailer. Would you call it upscale, working class, working class poor, working class broke, non-working rich?
In other words Mr. Retailer did you just look at the top line number and decide to go out in public and just show how much you know ? Because I haven't seen reports anywhere of 15% increases in retail, but I don't want to hurt your anonymous authority on such matters . I would however like to know what drugs your on, where you bought them and how the drugs are doing year over year?
Jesus H Christ, your post epitomizes the downward trend ZH has been taking recently.
Here's the basic math:
Can you do the math? Guess what people are doing with their 'free' $2k/month? If you knew you were going down and your home was hopelessly under water, what would you do? What are millions of Americans doing - the only thing they are really good at?
That's why you see retail sales tax numbers staying level or even increasing in some states like Calif, whereas both personal & corporate income tax receipts are cratering. Do you see how simple this is if you pause a moment to think?
What the the "H" stand for?
I've been reading here for the better part of a year, but only recently began posting. I needed the time to get somewhat up to speed on the financial shenanigans that I never majored or participated in.
So, it's mildly troubling to me to witness regular, intelligent posters like you (and CD, AM, MsC, etc...) take note of the downward trend here in the ZH community. I suspect that this "downward trend" is a predictable, calculable result of the impact that ZH has had in the world at large, and merely reflects a concerted effort by counterparties to defend the indefensible.
Don't be discouraged. There are certainly posters here trying to undermine the public discourse and collective enlightenment that's occurring as a result of your efforts. Keep the faith, and keep up the good work!
MP
When there is a (D) in the White House all economics are spun up.
When there is a (R) in the White House all economics are spun down.
it's all pretty simple, then. most excellent news, that.
Me Jane. You wrong.
http://www.zerohedge.com/article/how-jane-wells-popped-steve-liesmans-an...
LOL
That ape in the old version of the movie lived for quite long.. proves that apes will prevail!
Do you have a good theory why the sales tax collections don't reflect a rise in retail sales?
My naive take, and I pretend to know nothing about the industry at all, is that the mom-and-pops who aren't counted in the retail sales numbers have folded up shop, so it's kind of like a survivorship bias.
Edit: Sorry, I meant to direct this question to Sudden Debt.
Do you have a good theory why the sales tax collections don't reflect a rise in retail sales?
Bingo. That's where reality lives. Looking at anything else is looking at an illusion.
Mr. Retail,
so far the retail sales for the 1st 3 months were much better than the sales during same 3 months of 2009, which btw were 3 months of $600+k layoffs per month, collapsing stock market and record-low consumer confidence. Tell me something:
Do you also expect 1Q2011 be 15% better than 1Q2010? And while past growth was great, will the future growth justify current stock prices?
Also, could you do a public service and clarify something for me that I genuinely do not know: if a retail store chain closes 25 out of 100 stores, and then reports 15% higher same-store-sales, is it good or bad? And how much exactly are they selling as a company? (more or less than before store closures?)